Kuwait -- ECONOMY
In the eighteenth and nineteenth centuries, Kuwait's economy
was based on trade. The city of Kuwait rivaled Basra in Iraq as
an entrepôt for trade between India and parts of the Middle East.
Kuwait became a conduit for commerce from the gulf to Asia, Africa,
and Europe. It was Kuwait's fine natural harbor that first attracted
the Bani Utub settlers, and they made much of this maritime advantage.
In the nineteenth and early twentieth centuries, the economy relied
primarily on pearl diving, and merchants and sailors harvested
the gulf's natural pearl banks, which were among the richest in
the world. In the first decades of the twentieth century, Kuwait
had about 700 boats, employing approximately 15,000 men. When
the pearl-diving season (mid-May to mid-September) ended, Kuwaiti
merchants used their ships for long-distance trade. From this
trade, a shipbuilding industry developed, and Kuwaiti craft became
known throughout coastal Arabia for their quality. Fishing was
also a small but important industry. The tradition of seafaring
and trade gave Kuwait a thriving merchant class and an outward
orientation that remained important into the 1990s.
Although prosperous by regional standards, Kuwait's economy offered
only a meager existence to most of the population, especially
those outside the ruling families and the merchant families. Even
this meager existence began to suffer with the decline of pearling.
That industry, the basis of Kuwait's economy, came to a sudden
end in the 1920s with the development of the process of making
cultured pearls in Japan and then the Great Depression. Fortuitously,
the pearl industry declined just as a new source of revenue was
emerging. In 1938 oil was discovered in Kuwait. Once oil exports
began in the immediate post-World War II years, economic development
became nearly continuous.
Data as of January 1993